Contract Buyouts Are Ruining NBA Parity

Buyouts Are Ruining NBA Parity: The NBA’s trade deadline was once a time when losing teams were compensated for trading their aging but serviceable veterans to a title-contending team. But more recently the trade deadline has turned into a waiting game of midseason free agency. Markieff Morris was an essential component of the Lakers’ championship run last season.

P.J. Brown got the 2008 Boston Celtics into the Eastern Conference finals. Boris Diaw landed with the San Antonio Spurs in 2012 and wound up staying as a critical reserve on their 2014 championship team.

Last week we saw the reigning champion Los Angeles Lakers again go back to the buyout market to improve their team. The Lakers’ add Andre Drummond, 27, who is averaging 17.5 points and 13.5 rebounds per game this season.

The two-time All-Star has led the league in rebounding in four of the last five years. On the East Coast, the New York Nets were able to add both Blake Griffin 11.5 PPG, 5.0 REB, 3.5 AST, and LaMarcus Aldridge 13.7 PPG, 4.5 REB, 1.7 AST.

In both cases, the Lakers and Nets had the opportunity to trade for these players but chose to wait for the inevitable contract buyouts. You can’t blame the general managers of these teams for utilizing the system to their advantage.

The fault lies with the NBA and commissioner Adam Silver for not closing this obvious loophole that allows the rich to get richer. Before I can explain why I believe buyouts are ruining NBA parity let me describe how they work.

How Contract Buyouts Work

A contract buyout is essentially a divorce between a player and their current team. The two sides agree on a mutual separation where the player surrenders an agreed-upon amount of his guaranteed salary, and in exchange, is released and allowed to sign with any other team as a free agent.

99% of the time the new team is a title contender. If a team buys a player out, he cannot re-sign with or be claimed off of waivers by that same team for one year or until the contract that was bought out expires, whichever comes later.

Typically, there are a couple of factors that go into the decision to buy out a players contract they are:

  • In the final year of their contract
  • A veteran whose age, injury history, declining skills, or positional redundancy limits his team’s interest in retaining him for the rest of the season or resigning him
  • Currently on, or was traded to before the deadline, a lottery team that has little to gain for such a veteran and rather develop a younger player or open up roster spots.

The reasons behind such moves are equitable for both sides. The team is able to save a bit of money and open roster spots while the player is free to join any team in the league.

More often than not, the player is motivated to either compete for a championship or to display their value with a more talented group ahead of their impending free agency.

Why Contract Buyouts Are Ruining NBA Parity

Now for the time you’ve all been waiting for…

First off, The words “Buyout Market” or “Midseason Free Agency” are not in the NBA Collective Bargaining Agreement. There are almost no rules or regulations for it, the current system that we have watched unfold in front of us is merely because of players and agents forcing small market teams to meet their demands.

The buyout market purely helps bigger market, glamor, and contending teams, further warping the competitive landscape of the NBA against many teams that rule like the salary cap and luxury tax are meant to protect. “You’re just helping the rich get richer,” says a general manager with a small-market team to Sports Illustrated.

Bought-out players typically sign for a prorated portion of the minimum salary, allowing their new teams to add talent without regard for the salary cap.

It is very clear that these players prefer to go to a team that they believe even without them would be doing to the finals and their addition will culminate in them hoisting the Larry O’Brien trophy at the end of the season. For the other 18 teams looking to make a title run, their road to add additional talent came with a cost

The Nuggets traded players and draft picks to get Aaron Gordon, The Clippers had to give up Lou Williams, the three-time Sixth Man of the Year, to get Rajon Rondo. The Bucks traded players and pick to get P.J. Tucker.

The Sixers traded players and picks to get George Hill. The Heat traded players and draft considerations to get Victor Oladipo. Meanwhile, the Lakers and Nets were able to acquire their talent essentially for free.

Another reason buyouts are hurting league parity is the ability the new teams have to recruit the bought-out players for next season.

Rival teams pursuing those players next season will only have a month or so to recruit those players meanwhile the team a player signs to after being bought out will have that player for the remainder of the current season and can much easier sell that player on taking a small contract for the ability to run it back for another title.